Hi Kim,

Have you set up Sage 50 to use Foreign Currency?

Setup | Settings | Company | Currency

Sage 50 will compute the foreign currency exchange if it is entered with each transaction.

I hope that helps, please post back!

I am just now learning about setting up a US bank account properly so I think I am OK there. I'll explain where my confusion is really coming from...

It's the income and expense accounts that I am confused about. When I post a US Sale (in US currency) for instance, I post the invoice to the income account "Sales". But when I post a CDN Sale (in CDN currency), I also post that to the same "Sales" account. Obviously, I can't have two different currency transactions in the same income account.

I have a CDN bank account and a US bank account. So we invoice our US customers in US funds and they pay in US funds. CDN is the same. But how do I handle the actual CDN equivalent of a US sale? Must I make a JE every time I invoice a US sale, for instance, if I invoice 100,000 US funds, do I make a JE for the variance? If the exchange rate on the day of the sale is 1.3 do I post an extra 30,000 to sales as an adjusting JE?

And conversely, when we pay US expenses, I post the bill to the expense account in US funds and we pay it in US funds. But the expense account contains US expenses and CDN expenses. If a US supplier bills us 1000.00 in US funds, we post the expense as 1000.00 to, for example, Parts Expense. But in actuality, it is really a 1300.00 CDN equivalent expense. So do I make a JE for every expense posted? I fear I have a mess to clean up! Wish I could chat with you by phone.

Thanks for looking at this! I really appreciate it. I hope I've explained this clearly.

Kim

Kimberly1963 said:

When I post a US Sale (in US currency) for instance, I post the invoice to the income account "Sales". But when I post a CDN Sale (in CDN currency), I also post that to the same "Sales" account.

Yes, all accounting is done in one 'home' currency.   The equivalent of the U.S. sale amount is translated into $CAD and recorded as that. 

Kimberly1963 said:

Obviously, I can't have two different currency transactions in the same income account.

All of the dollars recorded in the income account are in Canadian currency.  The fact that some of them came from U.S. dollars is only relevant in the U.S. bank account.

Kimberly1963 said:

I have a CDN bank account and a US bank account. So we invoice our US customers in US funds and they pay in US funds. CDN is the same. But how do I handle the actual CDN equivalent of a US sale? Must I make a JE every time I invoice a US sale, for instance, if I invoice 100,000 US funds, do I make a JE for the variance? If the exchange rate on the day of the sale is 1.3 do I post an extra 30,000 to sales as an adjusting JE?

If you invoice $100,000 in U.S. funds and the rate you put into the U.S. invoice screen for conversion is 1.3000, the Sage 50 software will record that your customer owes you $100,000 U.S. dollars, which is worth $130,000 in the Home Currency of Canadian dollars.  Press control-J to see the journal entry before you post, and you'll see what it's doing.

Kimberly1963 said:

And conversely, when we pay US expenses, I post the bill to the expense account in US funds and we pay it in US funds. But the expense account contains US expenses and CDN expenses. If a US supplier bills us 1000.00 in US funds, we post the expense as 1000.00 to, for example, Parts Expense. But in actuality, it is really a 1300.00 CDN equivalent expense. So do I make a JE for every expense posted?

If you have foreign currency enabled, and the vendor is set up as a U.S. dollar vendor, all the conversions are done automatically, based on the rate you type in.  We use the Bank of Canada 'Noon Rate', but I think CRA allows you to pick a rate each month. 

Kimberly1963 said:

I fear I have a mess to clean up! Wish I could chat with you by phone.

It's easy to go a long way down the wrong road in any software, and sorting it all out can be a trial.   I've seen lots of work-arounds and methods of recording of foreign currency purchases as Canadian with some work-arounds and numerous entries to make it all come out even at year end.  The Sage 50 foreign currency module is easy to use once it's set up, and you're past the pain of converting all the open invoices to U.S.  

Once a customer or vendor has been used, you can't just change the currency, so you'll have to create new customer and vendor records, then adjust any open invoices.

The 'Universal Construction' sample file that comes with Sage 50 is set up for foreign currency, payroll, departments, projects, etc. and can be a great reference to quickly check how something can be set up, and how it works.   Find a U.S. vendor or customer and set up an invoice.  Press control-J to see what's going to post.  Look at the U.S. bank G/L report (and notice the drop-down that lets you see it in three different ways)

Unfortunately as I'm no longer set up to support clients, I recommend you locate an accountant in your area to help you get this set up properly.  But I do check this forum  when I have no more 'Mighty Ships' or 'NOVA' on PVR.

If the person you consult tells you not to bother with setting up foreign currency in Sage 50 and to just use Excel, just take that as code for 'I don't know how', and keep dialing! 

We have ALL been at the bottom of a steep learning curve and / or in a time crunch to get something filed or sorted out.  I didn't have time to step away and learn then come back to it, but I also didn't have the time to do it over if it was wrong.

For deeper and more complete learning I recommend any further education course, or a tutorial such as Mary Purbhoo's 'Using Simply Accounting'  (now Using Sage 50') book.  Anything after 2007 will have pretty well the same screens, etc. that the latest release has.

THANK YOU so much for your thorough and thoughtful reply! I can't tell you how much I appreciate your time. I think I know how to procede. If I have any followup questions for you I will let you know. Thanks again!! Kim.